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http://www.nytimes.com/2012/02/13/world/europe/greeks-pessimistic-in-anti-austerity-protests.html?_r=1&pagewanted=all

Greek Parliament Passes Austerity Plan After Riots Rage
 
By NIKI KITSANTONIS and RACHEL DONADIO
 

ATHENS — After violent protests left dozens of buildings aflame in Athens, the Greek Parliament voted early on Monday to approve a package of harsh austerity measures demanded by the country’s foreign lenders in exchange for new loans to keep Greece from defaulting on its debt.

Though it came after days of intense debate and the resignation of several ministers in protest, in the end the vote on the austerity measures was not close: 199 in favor and 74 opposed, with 27 abstentions or blank ballots. The Parliament also gave the government the authority to sign a new loan agreement with the foreign lenders and approve a broader arrangement to reduce the amount Greece must repay to its bondholders.

The new austerity measures include, among others, a 22 percent cut in the benchmark minimum wage and 150,000 government layoffs by 2015 — a bitter prospect in a country ravaged by five years of recession and with unemployment at 21 percent and rising.

But the chaos on the streets of Athens, where more than 80,000 people turned out to protest on Sunday, and in other cities across Greece reflected a growing dread — certainly among Greeks, but also among economists and perhaps even European officials — that the sharp belt-tightening and the bailout money it brings will still not be enough to keep the country from going over a precipice.

Angry protesters in the capital threw rocks at the police, who fired back with tear gas. After nightfall, demonstrators threw Molotov cocktails, setting fire to more than 40 buildings, including a historic theater in downtown Athens, the worst damage in the city since May 2010, when three people were killed when protesters firebombed a bank. There were clashes in Salonika in the north, Patra in the west, Volos in central Greece, and on the islands of Crete and Corfu.

Greece and its foreign lenders are locked in a dangerous brinkmanship over the future of the nation and the euro. Until recently, a Greek default and exit from the euro zone was seen as unthinkable. Now, though experts say that the European Union is not prepared for a default and does not want one, the dynamic has shifted from trying to save Greece to trying to contain the damage if it turns out to be unsalvageable.

“They’re trying to lay the ground for it, trying to limit the contagion from it,” said Simon Tilford, the chief economist at the Center for European Reform, a research institute in London. Still, he added, letting Greece go would set a dangerous precedent, and it would be “fanciful” to think otherwise.

Greece’s limping economy yields large trade and budget deficits, and none but the European Central Bank, the European Commission and the International Monetary Fund — known collectively as the troika — are willing to lend the nation the money it needs to stay afloat. The troika is demanding more concessions to placate Germany and other northern European countries, where the bailout of Greece is a hard sell to voters. For its part, Greece is trying to preserve social and political cohesion in the face of growing unrest, political extremism and a devastated economy that is expected to worsen with more austerity. And the feeling is growing here and abroad that the troika’s strategy for Greece is failing.

The leaders of two of the three major political parties in Prime Minister Lucas Papademos’s interim coalition government — the Socialists and the center-right New Democracy party — agreed on the new round of austerity after days of tense debate, maneuvering and threats. The leader of the third, the right-wing Popular Orthodox Rally, refused to endorse the measures and later withdrew from the coalition.

In the debate on Sunday night before the vote, Mr. Papademos appealed to lawmakers to do their “patriotic duty” and pass the measures, saying they would be saving Greece from bankruptcy in March, when a bond issue comes due that Greece cannot repay without foreign help.

In a sign of how the crisis has frayed the political order in Greece, the three leading political parties all moved swiftly to expel lawmakers who had broken ranks with leaders in the voting.

Mr. Papademos is a former vice president of the European Central Bank who took office in November with a mandate to negotiate the new loan agreement before new elections are held, perhaps as soon as April. He acknowledged on Sunday that the program “calls for sacrifices from a broad range of citizens who have already made sacrifices.” But the alternative, he said, “a disastrous default,” would be worse.

European Union finance ministers, who were expected to approve the agreements with Greece at a meeting in Brussels last Thursday, instead sent a vote of no confidence, asking Greece for another $400 million in spending cuts.

When they meet again on Wednesday, they are expected to sign off on the measures and raise the stakes. A major topic of discussion is expected to be establishing an escrow account that would hold new money lent to Greece, and using it first to pay creditors, before the Greek government can tap it for any other purpose. The idea, backed by Germany and the Netherlands, may make further loans to Greece more palatable to German voters, but many Greeks see it as a fundamental loss of sovereignty and feel that they are being pushed into poverty to appease banks.

“Greece will become a protectorate,” said Natalia Stefanou, 45, a shoe store employee at a protest outside the Parliament on Sunday. She said she had not been paid since September and may soon lose her job entirely. “It’s not me I’m worried about, though,” she said. “I’ve got two children, aged 14 and 15. What kind of country are we going to leave them?”

Anti-German sentiment is also on the rise in Greece, where memories of the Nazi occupation during World War II are still vivid. “This is worse than the ’40s,” said Stella Papafagou, 82, who wore a surgical mask at the demonstration to fend off the tear gas. “This time the government is following the Germans’ orders. I would prefer to die with dignity than with my head bent down.”

European leaders, fearful that Greece’s crisis will undermine efforts to help other euro nations like Portugal and Spain, have been trying directly or indirectly in recent days to paint Greece as a special case, whose leaders have failed to transform its troubled and corrupt state fast enough. In an interview last week, the Italian prime minister, Mario Monti, said that in the highly unlikely event of a Greek default, “there would be extremely strong political policy and political responses to prevent any such phenomenon to go beyond Greece.”

Similarly, Fabrizio Saccomanni, the director general of the Bank of Italy, told reporters last week, referring to the risk of “contagion,” that “market indications seem to suggest that this problem is seen as minor.”

But others say that is wishful thinking. “If one country in the monetary union can default, so can another — that is one simple inference that bank managers and hedge fund mangers can infer, no matter what Mrs. Merkel or Mr. Sarkozy may say,” said Costas Lapavitsas, an economist at the University of London, referring to Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France.

“Portugal and Ireland have unsustainable debt,” he said. “Put two and two together, and it makes four.”

Mr. Lapavitsas, who has been calling for Greece to go ahead and default on its own terms, added that it was “absolutely unacceptable that this huge amount of Greek debt that ties the country hand and foot should be dealt with by some unnamed and obscure technocrats and unelected people.”

If Greece dug itself into a hole by borrowing beyond its means, as many argue, there is also a growing sense that the troika’s austerity regimen of spending cuts and tax increases is burying Greece alive in that hole. “The reason Greece is in this position is because of the strategy the troika imposed upon it,” said Mr. Tilford, of the Center for European Reform.

“The I.M.F. has never approached a country like this,” he said. “With this much austerity, it would always have a huge devaluation, too.”

Financial analysts said they expected investors to welcome news of the vote in Parliament.

“It’s a pause, it’s a relief,” said Milton Ezrati, the senior economist and market strategist at Lord Abbett & Company. “But it’s short-lived and everyone knows that. We’re buying a few more months before the next round of trouble.”

Jerry A. Webman, the senior investment officer and chief economist for Oppenheimer Funds, also struck a cautious note.

“It doesn’t solve the problem,” Mr. Webman said, “but it gives everybody the political cover to look for ways to solve the real Greek problem, which is how to get the country and its economy back on more stable footing.”

With more wage cuts and tax increases expected, Greeks are growing increasingly angry at their own lawmakers as well as the troika of lenders.

“They’ve all sold out in there, they should be punished,” said Makis Barbarossos, 37, an insurance salesman, as he waved a cigarette toward Parliament on Sunday. “We should put them in small, unheated apartments with 300-euro pensions and see, can they live like that? Can they live how they’re asking us to live?”


Niki Kitsantonis reported from Athens, and Rachel Donadio from Rome. Julie Creswell contributed reporting from New York, and Elisabetta Povoledo from Rome.

This is about valueation, and valueation is different for different entities

Case 1:
In an island with only 2 people, A capture 1 fish and B pickup 1 basket of fruits every day, and they both can not do the other's work, they will be happily exchange their daily products equally, it means the value of 1 fish equal to 1 basket of fruits

Case 2:
A capture 1 fish while B pick up 2 baskets of fruits every day, then the value of 1 fish will equal to 2 baskets of fruits, since fishes are difficult to get and fruits are easy to pick

But in real world, history price are critical, it means, if Case 1 happens before Case 2, then after B picked up 2 baskets of fruits, he will still be able to exchange 1 fish with 1 basket of fruits, and keep the rest 1 basket of fruits

This is more or less what happened in EU: Germany increased their productivity by 100%, but still keep the price of their products the same, while Greece still keep the original productivity. It means: Greece have to use 1 day's labor to exchange 1/2 days's labor from Germany. Given the same amount of loan, Greece worker have to work 10 hours to payback the loan, but Germany worker only need to work 5 hours

Somebody might ask: Why don't Greece also increase their productivity? In my opinion, they have the right to live a low productivity life, the person who give them a loan which is much higher than their productivity is the one to blame

-1, sorry.

This is about fiat money.  The stuff can be created in limitless quantities with no effort.  Fruits and fish are not like that, so your analogy is a fail from the start. 

Try something like: A print 1 euro while B print 1 drachma.  A print 10m euro and give to B, in exchange B agree to go live in Monaco and not print any more drachma.  Old neighbors of B now fish and grow olives for A in exchange for newly printed euro.  Economists say A very productive, in return these economists also can have some of the newly printed Euro. 

OK that needs a little work too but closer.  ;) 

 
     

It has to do with a country's government ability to loan money and spend it without its corresponding taxation. Greece outspent itself knowing it would be bailed out by the rest of EU. Germany and the other countries know this and refuse to have to extend a hand to a country who keeps on sustaining a huge lazy bureaucracy and absurd subsidies, so they force the Greek government to cut down, and of course the already lazy and freeloading population protests. Unfortunately there is no way to fix this because the Greek economy is already tied down to the EU so there is no "foreign" investment that can counterbalance the severe austerity measures imposed.

The "contagion effect" so much feared here is that all European countries are actually doing what Greece is doing to varying degrees, even Germany.

You cannot have economic union without its corresponding political union.

Just like in a big family, usually the hard working brother end up paying the debt for his playboy brother, there's no fairness. If those Europe countries want to combine to a big union, some countries are destined to sacrifice something,  and although some other countries consume more than they produce, they still think that they are treated unfairly  8)

Fairness or justice is just a feeling, each person/country have different personality/culture/climate/value, money is not a good benchmark to measure the fairness, it just forced everyone to accept same value, which in turn become slaves of money

True, but you can easily have a currency union without political union. For example, many countries use the US dollar or peg to the US dollar.

Greece could stay in the Eurozone, but the Greek government could default on its debt repayments. Of course, no-one would lend any more money to the Greek government. The government would immediately have to start spending within its means, and is that a bad thing?

But this crisis isn't about that. This crisis is about finding ways to keep Europe chugging along without exposing the folly of exponentially-increasing government debt.

That is a very good analogy, and you are right about each country having a different personality/culture/climate/value. Southern countries for example tend to have a more relaxing culture because they don't experience the harshness of winter so much, so they don't save for difficult times. I know this perfectly because I am a dual national - Mexican-American and know both cultures very well.

The debt of the Greek government is so bad that if they default, it would completely colapse, all services suddenly cutoff probably leading to dangerous anarchy if not outright revolution. So yes, now it would be a bad thing. The EU should not have allowed Greece to be so heavily indebted but they could not force them, because it is a political issue. The greek government "decided" on that.
Also true. Even the U.S. is at risk of this "contagion".

A short, sharp, shock is the least painful way out of Greece's mess. Anything else is just delaying the solution and storing up even bigger problems for the future.

I don't agree. Sovereign debt is like a an addictive drug. A country needs to gradually wean of its debt or else it is like a shock to its system and can actually kill it. Imagine the EU as a bunch of drunkards who need to quit drinking and get back to work, Greece being the worst of them. If you suddenly cutoff the alcohol to Mr. Greece, he will go into shock and the rest of the drunks are going to panic and everything collapses.

Which government has ever weaned itself off debt? On the other hand, plenty have defaulted and later recovered.

I'm still confused by the fact that in a day that money can be freely created out of thin air, such debt will still make so much pain...

Imagine 2 cases:

Case 1:
ECB just printed several trillions of euro and lend it to greece for 50 years, then greece will have plenty of cashes to spend: They hire all the leading construction companies to rebuild their country and buy what ever high tech/luxury things made in France/Germany to decorate their home

Case 2:
Greece suddenly find out an area rich of petroleum near their sea shore, it worth several trillions of euro, and ECB have to print several trillions of euro to trade these petroleum(otherwise the deflation will destroy europe). Then, Greece hire all the leading construction companies to rebuild their country and buy what ever high tech/luxury things made in France/Germany to decorate their home

Comparing these 2 cases, in the first one, Greece produced nothing, in the second one, Greece also produced nothing, but they find something others want. Most of people will accept case 2 but not case 1

Why? I guess down to the basic, it is about fairness or justice:

If Greece can get free money and spend, why France and Germany can not? If anyone can just print money and do not need to work, then there will be no one making the real products, people will soon find out the money have nothing to purchase, then the monetary system will collapse

But strangely, if Greece happened find lot's of petroleum, then no one will argue about it when they get same trillions of euro from ECB, although they still do not work, but now they have something that others want

See? As long as you can provide something that others want, you will be fine. It seems this is the common sense when people are looking at economy related phenomenon, it also means: If you can not impress others with your products/services, you will have trouble

So I think, the real problem of Greece now is that they can not provide something that impress others

Why do people need to impress others with their products/services? I remember there is a chinese saying: In society, everyone is a beggar, the big beggar make big money and the small beggar make small money

Is there any other better way?

What is alarming of Greece's debt is its proportion to their GDP. Of course Greece produces stuff and "impresses" others, but it is not enough in proportion to what they owe. Money can be created out of thin air as long as there are reasonable enough goods and services produced (moderate inflation), but if too much money is created without its equivalent production of goods and services you can either default on the loans or absorb this money in the economy creating hyperinflation.

Actually I have never bought the idea that more money will cause inflation, especially in developed countries (A millionare get 1 more million, would he push all the price of living material up? very unlikely)

Same for Greece: Greece GDP is only a couple of procent of whole EU economy, even issue them a loan as big as their GDP, the money supply for EU will barely increase by a couple of procent. Comparing with what FED has done after financial crisis (print 400%+ more money), this can almost be ignored

And for debt mathematics: If this year your debt is 1 million, and your production is 1 million, then debt rate is 100% of GDP, seems quite risky. But what if next year your income increased to 4 million, then from next years perspective, your loan is only 25% of the GDP, totally acceptable. So the key point here is to increase the income for next year. How to increase the income is the quesion, and income have very close relation to the loan that others can get and spend, so it's a chicken and egg problem again

+1
Good points.  Many generations of fiat money have deeply influenced us. 

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Greece is a cornerstone to the €. If greece fails, banks will fail (again). That´s why the banks are currently bailed out by tax payers.

devil's avocate:

if you have your cash in a german bank i'm afraid you have to lose it.
This would cause devastation. but you can't have double standards otherwise people are going to continue putting money in places they don't understand. I called both my banks a couple of months ago to ask how well capitalised they are and they couldn't tell me.

My question is, if this domino effect is followed where does the cash exit the euro zone? Cash isn't disappearing; it's moved. There's a creditor somewhere and to identify this might help unify the eeu.

You missed an important point on that. Then we are facing another war between Turkey and Greece.
So both are buying more german tanks, thus it is easy for germany to hold their debts ...
You see in case 2 there are no problems at all.  ;D

You got exactly what I thought of, Could have said cornerstone of a larger puzzle. If you take it away it starts to break up. Plus the whole stuff is pretty interconnected.
To germany it is more than just econonmy, an unerstricted yes to Europe is a core statement in Mrs. Merkels policy.
Inhouse she lost 2 Presidents in the past few years plus she opposed the new one (to come) heavily in the past.
Thus she badly needs some outstanding outdoor success. France (its banks) were heavily involved plus are a bit shaky, while she likes Sarkozy to be relected. ... just scratching the surface. But I think one can easily grasp where the road ist heading to.

Agreed plus it was much easier and even more profitable to blame rating agencys than do own homework.

Yes and for this reason I cannot wait until they default and the entire world economy crashes - once it does all the corrupt bankers, their politicians and other filth will be carved out of the system.

What will be left is the real economy: The struggling innovator, the hard manual worker, investors investing in real technology and development, the engineers, the farmers and the scientists.

I hope the Germans wake up, see that Merkel is selling them out to Goldman Sachs and kicks her out for some anti-EU politician.

I hope for the same in my country, but Germany is the critical one.

What's really ironic is that it's not even other people's money. Its really just money the central banks decided to create out of thin air and lend to the Greek government.

The debate is to whether keep on creating more money to lend to this country who just spends it recklessly.

One might argue that since creating money from thin air reduces the worth of every current holder's money; that it absolutely is other people's money that they are giving to Greece.

What's your point?  As long as someone other than the money printer is holding money, it's still "other people's money" isn't it?

I didn't say anything about asset holders, I said money holders.  That's a non-zero number of people.

A money supply increase of 3% will not create any noticeable inflation, especially those money are created to paying the debt. US FED has printed 400% money since financial crisis and the inflation is still very light. People need to save, those saving action absorbed all the newly produced money

Actually, the debt that Greece have today, has been spent long time ago. So the loss of the wealth has already happened, you can only punish Greece AFTERWARD, the reason they ran into this problem is simple: Their government loaned and anticipated they will earn more in the future, but they actually earned less in the future so that they are not able to payback the loan

Then, it will natually come to such a debate: How much extra loan you should get, in case you anticipate the future income will rise? The anticipation and its accuracy is the key. If you anticipate that your income will increase by 100% next year, then even your loan is 100% of this year's income, it is trivial.  And, each one's income increase next year will depend on how much loan the others can get and spend: No loans, no income increase

So, we could say like this: It is Greek's loan and spending raised Germany and France's income, now it is time for Germany and France to spend big and buy Greece products and raise their income in return

I don't see what "noticeable" has got to do with it.  It's inflation.  If it's measurable then it's happened.  Also: it's not the act of printing that causes inflation, it's the act of spending your printed money.  It doesn't all kick in at once, its effect is only felt as that new money is disbursed through the economy.  The government, who printed it, get pretty much 100% value for it though (which of course is why they do it).

The QE going on in the US and UK hasn't kicked in to cause inflation because it hasn't been spent yet.  That money was actually used to buy back bonds, so that more borrowing could take place.  It's effectively sitting on deposit at the respective central banks on behalf of the banks.  It's out there though, and once the banks start loaning it out again we'll feel it.


Agreed. This is true.  The money printing being used to roll over debt is effectively moving that money printing backwards in time to when it was borrowed.


Or more sensibly: now is the time for Greece to produce something that Germany and France wants and is willing to pay for.  Otherwise it's just a transfer payment in disguise, and it would be more efficient just to send the money instead of pity-purchasing stuff they don't want.

I see little difference between this crisis and the mortage crisis in the USA in 2008.
Banks exploit the hobo to take up loans they can't pay back. The only way banks can print money is by giving out loans.
They get bailed out anyway, so there is really no risk even if the hobo can't pay it back.  ( stabilizing feedback loop broken )

In the case of Greece, they take up huge loans and buy lots of stuff... like weapons from germany?.
So Germany and others keeps all the money, while greece keeps all the debt.

You'd think not having your own central bank would prevent the hobo greek from printing so much they ruin their economy.
This time they had LOTS of help to pull this off. In fact it would be much better if they had their own currency.
This would provide a feedback mechanism making sure their purchasing power would go down if they printed too much.  But the Euro won't budge even if they spend a ton.

The Greeks are so bad bla bla.. but on average they don't have a low retirement age nor high pensions and they work more than most other EU countries. So yeah I contradict myself. Sure the politicians in Greece haven't done a good job to build their country with all those loans, so the future prospects are not great. This might explain why they are targeted first. But then again, this isn't really about the Greek. This is just a symptom of the manipulation and failure of the whole system.

Greece like the banks must be allowed to fail and go bankrupt. For a country, the debt isn't really enforcable anyway.
The debt must be deleted. Greece starts with a clean slate, a new central bank and drachma 2.0. This is the way to do it.
They don't have to leave the EU, several countries including UK don't have the Euro so this is a non argument.

Each sovereign country with it's own government MUST have their own currency. The Euro destroyed that essential feedback loop holding their spending/trade balance in check. Over time all the countries should all go back to their own currency, unless they join together under a common government/budget.
The Euro should never have been invented in the first place. It's just an instrument to make the bankers more rich and create more inequality. You can claim hindsight is 20/20 but I'm damn sure several bankers saw this coming and knew how to exploit it.

Maybe, those money has already been spent long time ago, now newly printed money are only used to refinance the debt and wait for production to keep up

Actually I think it is the central bank's tighten action caused the financial crisis, but why do they tighten? (They might concerned about the validity of the currency)


That is questionable, what if Greece can not impress Germany and France with their products/services? And why do they need to? They could live a life without any Germany and France products, only self sufficient. Ricardo's comparative advantage theory is no longer suitable for today's high production power

Those islands are valuable because of their Greek history and culture, if they changed owner, the culture will not be there any more, then the island will not be attractive to travelers, just like any other small tropical islands

Yes; I think that is almost certainly the case.


Again agreed.  I guess at the moment the Euro's problems are monetary not fiscal.  That hasn't made the fiscal problems go away though.  They're still there waiting in the wings.


I don't think I agree -- comparative advantage will find a way.

However, what does it matter either way?  Greece is manifestly not self-sufficient.  While they want to borrow German and French money they had better find a way to pay for it (or default).  Greece is neither producing something that they can sell to others nor defaulting on its debt.  Instead it's borrowing more.  That is a course that has an inevitable outcome.

If the Greek government was to sell a few islands with self-sovereignty, the price received would be much higher.

Well the problem is they don´t have a cadastral land register. Thus they can´t tell whose land they would sell.

No land register, seriously?  What a joke. Maybe the EU should demand one instead of lower wages and subsidies.

This is no big deal. If land isn't on the register, ownership is established by looking at past transactions on that land.

In the UK, some property is on the land register, and some isn't. It's possible to transact both kinds of land safely.

Comparative advantage only apply to the situation that production can not keep up with the demand, thus increasing overall production efficiency is the concern. But after production speed has outpaced demand in modern times, how to increase the demand is the  question

In another word, "Demand=Big customer", if everyone will find a big customer, they will happily make a lot of money. Then who is this "Big customer"?   ---- Greece;) since they are the one that spend more than they earn, everyone that spend less than they earn is not a customer since they take more from you than they give you

In an island with only 2 people, both A and B produce 100 shells worth of products and consume 100 shells worth of products each month, it means that their production is equal to their demand. They will never get much richer. If A managed to make some savings, then B will accumulate same amount of debt (suppose their products can not be stored for a long time)

But, if A and B both can get 100 extra shells loan to spend each month, they will have more consumption, these consumption in turn will create some extra shells of earning for both of them, so after one month their income will increase to 120 shells, and as long as their income are increasing, their loan can also increase, this has been the case for most of the countries running fiat money today

Danger arises when one of them becomes more self-sufficient. For example A could produce whatever he want and he don't really need B's products since they are of low quality, he only need B's money to buy his products. In such a case, even B noticed that his sale towards A dropped quickly, as long as B has access to the loans, he can always cover up the hole with new loan and the whole process will take decades until it runs out of control

Why do you assume that only centralization can work?

My own property in the UK was unregistered when I bought it. The previous owners had sufficient papers for an uncontestable transfer. Basically the owners showed that their parents had bought the property in 1910, then willed it to them when they died. The owners also showed that they had "enjoyed uninterrupted use" of the property for over 12 years, which (at the time) was legally sufficient to show that no-one else had a claim on the property. It needed three documents, and was very straightforward: a property conveyance from 1910, a will, and a council tax statement.

Even if a seller doesn't have all the documents, you can buy insurance to protect yourself against the risk of buying a property that is not the vendor's to sell. In the UK, this insurance is not expensive, which suggests that there's not much risk.

After buying the property, we chose to register it. That was a big mistake. When we wanted to exchange a tiny sliver of land with a neighbor, this became a very expensive operation needing lots of lawyers and surveyors. If we had done the same thing with unregistered property, we could have done it with a handshake and some signatures on a sketch map.


In the UK, they tax the dwelling (the house), not the earth (the land). It's obvious (even to a council worker) whether or not there's a house.

Well they invented the word europe plus ... sorry for getting cynical ... they busyly bought german tanks and cold war was still very hot in those days. Nato and EU are somewhat interconnected.
Still the land register is not so much an issue, they badly need to collect taxes from those who could pay them. That is a core issue in greece these days.

Compare it to bitcoin where there is no central control.
Could be land is not so important but the gain you draw from it. So how about taxing the gain and leave the land as it is?

 ... damned ... I forgot to explain a point about owning land.
Where does this ownership originate from?
Is it legel to sell something that never belonged to you?

Nay ... be fair!
When Adam and Eve shared the apple, who owned the land this tree grew on?
 ... how would I know?

At least I am sure Adam and Eve weren´t Chinese.
Why? ...
If they were Chinese they´d rather eaten the snake than the apple.  :D

That's an interesting article, aside from the nonsense regarding "import certificates". However, he glosses over the important point that "intergeneration inequities" are a result of the legitimization of aggression (specifically taxation) in the form of government. In short, it's the government of Squanderville which is in debt, not the people of Squanderville; but the government is going to take what it needs to pay off that debt involuntarily from the people living in the area, even though they may not be the same people as lived there and voiced their approval when the bonds were issued and thus have no legitimate responsibility to pay it off.

In a free market you can't inherit other people's debts. Any estate which has more debts than assets is simply in default, leaving nothing to be inherited. The next generation always starts out with a clean slate.

No worry, easy to help ...
The story is located somewhere around Gilgamesh (http://en.wikipedia.org/wiki/Epic_of_Gilgamesh (http://en.wikipedia.org/wiki/Epic_of_Gilgamesh)).
So it is not bronze age, they already used iron in those days.  ;D

p.s.
Damned they will torture us for being on strange topics.

It's also interesting to see Buffet's view, he pointed out 16 hours of working, but how about those people can working 24 hours (by using automation and computer)? Would those guys buy out every thing? Or any other people have to work 24 hours to keep their deficit from growing?

This crazyness has to stop, no one should work more than 8 hours, and they should even reduce working hours to 4 to increase the employment rate. Robbing other people through hard working does not change the fact that it is still robbery

Both  ;D

Actually it is not robbery, but allure, since the consumption is always voluntary. Allure others into spending future income and trap them into debt, typical credit card company's business

My point is that the consumption should not deviate from the production too much, otherwise there will be imbalances in the system. If someone suddenly increased their production by a great margin and their consumption did not increase at the same pace, then either their products will drop in value due to oversupply, or someone else is going to have a debt due to increased consumption

Let's suppose the Greek really spent others money, then, how to prevent other people from spending your money?

A capture fish and sell them to market, B pick fruits and sell them to market, both of them use exchanged shells to buy other products. But from one day, B just buy everything with a long term loan without pick enough fruits, what will happen?

1. The price of fruits will rise due to reduced supply
2. C will produce fruits due to rising prices
3. Fruit price get back to normal
4. B can not produce fruits any more since now the competition is hard (C took his job)
5. B will live on loan and accumulate huge debt

Both A and C thought the money are created by them (or corresponding to wealth created by them), so they can think that B is spending their money, but the essential part is: B is consuming A and C's products without providing any valuable things in exchange. Although B provide money as exchange, he did not contribute to the amount of consumable wealth

How much B should provide in exchange, is very difficult to judge. It is not decided by B's labor, but mostly decided by A and C's desire (if Greece can provide lots of petroleum, it is no problem at all). So, as long as A and C desire money, B can pay them with money, A and C will feel satisfied

A want others to buy his products as much as possible, but on the other side, he will feel unfair if B just buy his products by printing money, this is essentially a moral question, not an accounting or economy question

So, if A can not do anything about B, the only way to prevent B from spending A's money is: A spend the money he earned immediately and exchange to consumable goods, thus he will make sure no one can have access to his labor. But that is also not very practical, due to none of the consumable goods can be kept for long, and transportation and liquidation for them is also troublesome

Then he will realize that if he would like to hold the value in goods form, he will immediately face lots of risk, so finally maybe he still prefer holding the currency, but he will try all he can to stop B from buying his labor with loaned money

So who is the most clever guy here, B of course. He spent big, lived a good life, and have lost his job, thus he has nothing to pay the debt, what the banks can do is only write off his debt and keep going forward. And IMO, since both A and C has earned enough money in this process, they will feel satisfied anyway, why should they blame B? Of course when they start to spend their savings, they will find out that there is not enough goods in the market, but that is many years later, and if that is the case, B will find a job and payback his debt

We need more country like Greece to raise up the GDP for those export based countries  ;D

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WASHINGTON (MarketWatch) — Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.

Analysts said the new approach would allow the Fed to move despite high oil prices.

Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates, according to a story in The Wall Street Journal.

This “sterilized” quantitative easing, would use reverse-repurchase agreements to keep the money from flowing to bank reserves.
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Why can't such measurement apply to Greece? The printed money is used to buy the debt, and that money is exclusively reserved for  finance the debt, it should not flow into the bank reserves, but make the banks' balance sheet much healthier: The toxic assets (or debt, or loss) are moved from bank's balance sheet into FED's balance sheet, so that banks can operate without worry

You can't make debt just go away, as long as the government is using more than its earning you will have inflation - spending means SOMEONE is getting paid and THAT money goes to the market.

In time productive people will switch to BTC and other stuff and also try to avoid paying taxes.


In the end the leeches of the world are left with a lot of worthless paper.